Home Business NewsBusiness London SMEs owed £115k in outstanding invoices

London SMEs owed £115k in outstanding invoices

24th Oct 16 11:34 am

Invoice troubles eating into businesses’ profts

SMEs in London are owed an average of £115,000 in outstanding invoices, according to the latest Business in Britain report from Lloyds Bank Commercial Banking.

This is an increase of eight per cent since the last Business in Britain report in January 2016, with 34 per cent of firms in the capital citing late payments as the biggest cause of cashflow problems.

The report also found that a third (32 per cent) of London’s smaller firms are currently owed more than £200,000 in outstanding invoices, up from 27 per cent in January.

The issue of late payments is also likely to persist into 2017, with a net balance of 20 per cent expecting more customers to require deferred payment terms in the next six months.

Meanwhile, London’s SMEs possess an average of £482,000 in assets outright. This represents a marginal decrease of less than one per cent since the start of the year.

London SMEs say they are expecting to invest an average of £1.62 million into their business over the next six months. This is down from January when this stood at £2.36 million, suggesting decision makers are concerned by recent political and economic shocks but still considering significant investment plans.

Stephen Hand, area director, Lloyds Bank Commercial Banking, said: “If businesses are issuing more invoices and investing in more assets, then this is very positive for them and the economy.

“But if companies are having to wait longer to be paid, and are reporting that they expect to face an even longer wait in the future, this slowing of payments could be holding businesses back from releasing critical cash to drive future growth.

“The amount of money that firms have tied up in unpaid bills and other assets is significant, and this report suggests that these sums could be unlocked if businesses were more aware of the funding options that are open to them.”

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